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Financial Accounting

ASSIGNMENT
CHAPTER # 4 (Problem 4A-1 to 4A-2)

Registration: 2018-(Fall)-EMBA-004
Semester - 1 (MBA Executive)

Submitted to: Prof. Dr. Raza Saeed


Submitted by: Sohail Akram

Sohail Akram (EMBA) Page 1 of 4 Chapter 4 (4A-1 to 4A-2)


Problem 4A-1
ADJUSTING JOURNAL ENTRIES (Alta Sequoia Resort)
Entry Account Name & Discription Ref Debit Credit
a Salaries Expense $ 7,900
Salaries Payable $ 7,900
Record Salary Expense Accrued for december
Explanation: Salaries expense will appear in income statement of Alta Sequoia Resort
December 31; The Salaries payable is the laibility that will be paid in following year will appear
in balance sheet laibility side.
b Rent Receivable $ 11,075
Rental revenue earned $ 11,075
Record Rent earned accrued
Explanation: Rent receivable appear in balance sheet Asset Side ; The credit side Rent Revenue
Earned shown in Income Statement as a revenue.
c Unearned Rental Revenue $ 6,400
Rental revenue earned $ 6,400
Record two month rental revenue
Explanation: Unearned rental Revenue will be go down from $6,400 in Balance Sheet Laibility
Side; and Credit entry shown in Income Statement Revenue.
d Limousine Rental Expense $ 1,560
Limousine Rent Payable $ 1,560
Record limousine rental expense accrued for 13 days
Explanation: Limousine Rental Expense will appear in income statement of Alta Sequoia Resort
December 31; The Limousine Rent payable is the laibility that will be paid in following year will
appear in balance sheet laibility side.
e Interest Expense $ 375
Interest Payable $ 375
Record one month Interest accrued
Explanation: Interest Expense will appear in income statement of Alta Sequoia Resort
December 31; The Interest payable is the laibility that will be paid in following year will appear
in balance sheet laibility side.
f Depreciation Expense ; Building $ 58,500
Accumulated Depreciation; Building $ 58,500
To Record one year Depreciation Expense
Explanation: Depreciation Expense will appear in income statement of Alta Sequoia Resort
December 31; The Accumulated Depreciation will appear in balance sheet and deducted from
building value.
g NO ENTRY
Explanation: Agreements have no any treatment for fair maintaining books of Accounts
h Unexpired Insurance $ 2,400
Insurance Expense $ 2,400
Record Insurance Expense Accrued for Four month
Explanation: Unexpired Insurance is the asset of Alta Sequoia Resort so appear in Balance
Sheet; Insurance Expense is the part of income Statement.

Sohail Akram (EMBA) Page 2 of 4 Chapter 4 (4A-1 to 4A-2)


Problem 4A-2 (a)
ADJUSTING JOURNAL ENTRIES (LAW OFFICE of PAT HAMILTON)
Entry Account Name & Discription Ref Debit Credit
a Interest Expense $ 200
Interest Payable $ 200
Record Interest Expense Accrued for April
b Salaries Expense $ 970
Salaries Payable $ 970
Record payable salaries expense
c Unearned Retainer Fee $ 4,700
Legal Fee Earned $ 4,700
Record legal fee earned accrued
d Legal Fees Receivable $ 2,780
Legal Fee Earned $ 2,780
Record on Credit Legal Fee Earned in April
e Insurance Expense $ 500
Unexpired Insurance $ 500
Record one month Insurance Expense
f Office Rent Expense $ 1,600
Prepaid Office Rent $ 1,600
To Record office rent for the month April
g Office Supplies Expense $ 660
Office Supplies $ 660
To Record Utilised office Supplies in April
h Depreciation Expense ; Office Equipment $ 220
Accumulated Depreciation; Office Equipment $ 220
To Record one month Depreciation Expense

Problem 4A-2 (b)

As above adjusting Journal Entries and given Trail Balance Total revenue earned as in account
Legal fees earned is "$9,060/-" and after deduction of all Expense Net Income is "$1,030/-"

Sohail Akram (EMBA) Page 3 of 4 Chapter 4 (4A-1 to 4A-2)


LAW OFFICE OF PAT HAMILTON
WORK SHEET
FOR THE MONTH ENDED APRIL 30, 1994
Trail Balance Adjustments Adjusted Trail Balance Income Statement Balance Sheet
Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr
Balance Sheet Accounts:
Cash 10,060 10,060 - 10,060
Legal fees Receivable 2,780 2,780 - 2,780
Unexpired Insurance 3,000 500 2,500 - 2,500
Prepaid office rent 4,800 1,600 3,200 - 3,200
Office Supplies 1,460 660 800 - 800
Office Equipment 26,400 26,400 - 26,400
Accumulated depreciation: Office Equipment 220 - 220 220
Notes Payable 16,000 - 16,000 16,000
Interest Payable 200 - 200 200
Salaries Payable 970 - 970 970
Unearned retainer fees 15,020 4,700 - 10,320 10,320
Pat Hamilton, Capital 20,000 - 20,000 20,000
Pat Hamilton, Drawing 3,000 3,000 - 3,000
Income Statement Accounts: - -
1,580 4,700 -
Legal fees earned 9,060 9,060
2,780
Salaries expense 2,680 970 3,650 - 3,650
Miscellaneous Expense 1,200 1,200 - 1,200
Office rent Expense 1,600 1,600 - 1,600
Office Supplies Expense 660 660 - 660
depreciation Expense: Office Equipment 220 220 - 220
Interest Expense 200 200 - 200
Insurance Expense 500 500 - 500
Total 52,600 52,600 11,630 11,630 56,770 56,770 8,030 9,060 48,740 47,710
Net Income 1,030 1,030
9,060 9,060 48,740 48,740

Sohail Akram (EMBA) Page 4 of 4 Chapter 4 (4A-1 to 4A-2)